Monday, April 26, 2010

Learning from others mistakes?Look through the nerds eye....

The other day I was reading about the 'drama' by a Hyderabad based NRI involved in the scam of money laundering.The person being the director of 'City Limousines Ltd.' reportedly accepted deposits to the tune of Rs.1,500 crores and.....yeah your right.He ran away with the money.

This isn't the first time that such a thing has happened.The promise of large returns has always lured the middle class to invest blindly.

Lets work out a simple math.The banks offer a return of 8% on the fixed deposits.These fraudsters attract you with a RoI @ 16%.That means that the companies should at least earn a return of 27-30% on the investment to pay the deposit holders,meet other expenses and pocket a handsome profit.This in turn means that the person doing business with the company has to earn 36% on his investment to survive.Why would a person shell out that extra money when there are others offering him the same for a much lesser price!?So with the cash losses mounting,the directors have got no other option but to run away with what is remaining.Hard earned money is down the drain.....No.It's in others pockets.....

This happened before.People don't learnt from others mistakes.....

Lets take another example.

Few months ago,a doctor got an e-mail from an unknown person which said that the doctor had won 50K GBP in a lottery(lott of money!) and that he had to mail the reply to the person via e-mail to claim the money.The doctor shelled out money so that the person could clear 'legal' barriers and send him the lottery amount.What happened next is something everyone knows...
A few days later,a software engineer(yes our very own Hi-Tech walah) was duped on the same lines.

People don't learnt from others mistakes.....

Lets take another scenario.The Global recession.

The internet boom started in the 1990's.People were buying computers and taking internet connections(telephone lines provided by VSNL with a 'free' e-mail id).Business started with websites.This saw the formation of JV's which saw investors putting in money heavily in the website business.BOOM!It wasn't long before the famous 'dotcom burst'.

Coming to our Global Recession.The real estate boom saw excess lending on the same security(Subprime crisis-Citi Bank).MBS were brought by major banks in Europe and America.The liquidity crunch followed with the real estate crashing,and mortgagees unable to pay up their loans.Liquidity crunch followed and thus the 'recession' phase of the economic cycle started all over the world.

I'm not saying that the dotcom burst had something to do with the GR.The common factor in the above two examples is high expectations of high returns.The bubble eventually has to burst........

Nothing was learnt from previous mistakes....

By using a wee bit of commonsense and learning from others lessons,many other situations like above can be prevented.You don't need an educational qualification nor a great work experience to take decisions in situations that you come across in daily life.After all Indians are born logical!(That's the reason why the IT industry is booming with our engineers writing algos,bugging and debugging.On the other hand the number of patents pending approval are 716 compared to 40k from the US and 30k from China.)

It's only that we have to look at a situation with an eye of spotting a loop hole,as Sherlock Holmes says "I was looking for it!"



  1. Theres a remarkable difference between the first post and the second one.
    and this thing u got started, its inspiring! when u start of early, u reach farther. so way to go man!! Nerd Base rocks!!

  2. The point I wanted to drive home was that people r not learning from others mistakes.....

  3. Nattyy .. u killed it .. and the scenrios are awesum ... ! way 2 go! !

  4. Dude good post !! Dnt get so obvious that yu are a comm grad

  5. yeah we get that, but who applies man?!


So....What do you think?